Question 1

The first task in international financial management is to raise funds for the firm.

Accepted Answer

A) True 
 B)False

Question 2

Currency swap is an agreement to exchange one currency for another, according to a specified schedule.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is true of global money market?

Accepted Answer

A)  A great advantage for investors in the global money market is the ability to access a wide range of investment opportunities. 
B)  It refers to the collective financial markets where firms and governments raise long-term financing. 
C)  The maturity period for the funding obtained from the global money market is over ten years. 
D)  It refers to the collective financial markets worldwide where firms and governments raise short-term financing. 
A)  A great advantage for investors in the global money market is the ability to access a wide range of investment opportunities. 
B)  It refers to the collective financial markets where firms and governments raise long-term financing. 
C)  The maturity period for the funding obtained from the global money market is over ten years. 
D)  It refers to the collective financial markets worldwide where firms and governments raise short-term financing.

Question 4

Why is harmonization of world accounting systems favored?

Accepted Answer

Harmonization is favored for a number of

Question 5

Which of the following is characteristic of the parent's perspective in capital budgeting?

Accepted Answer

A)  It estimates future cash flows from the project in the functional currency. 
B)  It adds the subsidiary's after-tax operating cash flows with the project's cost of capital. 
C)  It seldom uses the currency of the primary economic environment in which it operates. 
D)  It estimates the incremental after-tax operating cash flows in the subsidiary's local currency. 
A)  It estimates future cash flows from the project in the functional currency. 
B)  It adds the subsidiary's after-tax operating cash flows with the project's cost of capital. 
C)  It seldom uses the currency of the primary economic environment in which it operates. 
D)  It estimates the incremental after-tax operating cash flows in the subsidiary's local currency.

Question 6

Funding obtained from sources inside a firm is known as ________.

Accepted Answer

A)  structural financing 
B)  grid loan financing 
C)  internal network financing 
D)  intracorporate financing 
A)  structural financing 
B)  grid loan financing 
C)  internal network financing 
D)  intracorporate financing

Question 7

All of the following are characteristic of the parent's perspective approach in capital budgeting EXCEPT that it ________.

Accepted Answer

A)  estimates future cash flows from the project 
B)  uses the subsidiary's local currency 
C)  forecasts forward rates 
D)  uses the functional currency of the parent 
A)  estimates future cash flows from the project 
B)  uses the subsidiary's local currency 
C)  forecasts forward rates 
D)  uses the functional currency of the parent

Question 8

Capital budgeting is intended to ________.

Accepted Answer

A)  assist in the means by which subsidiaries and affiliates charge each other as they exchange goods and services 
B)  help managers decide which international projects provide the best financial return 
C)  defer payment for goods and services received from the parent firm 
D)  eliminate the need for international accounting experts 
A)  assist in the means by which subsidiaries and affiliates charge each other as they exchange goods and services 
B)  help managers decide which international projects provide the best financial return 
C)  defer payment for goods and services received from the parent firm 
D)  eliminate the need for international accounting experts

Question 9

The purpose of capital budgeting is to defer payment for goods and services received from the parent firm.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following best explains the emergence of a large Eurocurrency market?

Accepted Answer

A)  lower interest rates on Eurocurrency loans 
B)  regulations of home-country banking systems 
C)  loans repaid interest-free at face value 
D)  low interest rates on Eurocurrency deposits 
A)  lower interest rates on Eurocurrency loans 
B)  regulations of home-country banking systems 
C)  loans repaid interest-free at face value 
D)  low interest rates on Eurocurrency deposits

Question 11

Which of the following is a direct tax?

Accepted Answer

A)  customs tax 
B)  corporate income tax 
C)  VAT 
D)  sales tax 
A)  customs tax 
B)  corporate income tax 
C)  VAT 
D)  sales tax

Question 12

Momentum trading is accomplished via computers programmed to conduct massive buying or selling when prices reach certain levels.

Accepted Answer

A) True 
 B)False

Question 13

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

Accepted Answer

A) True 
 B)False

Question 14

The global capital market has grown rapidly due to government deregulation, which has made international movement of capital easier.

Accepted Answer

A) True 
 B)False

Question 15

________ is the currency risk that firms face when outstanding accounts receivable or payable are denominated in foreign currencies.

Accepted Answer

A)  Translation exposure 
B)  Transaction exposure 
C)  Spot exchange rate 
D)  Multilateral netting 
A)  Translation exposure 
B)  Transaction exposure 
C)  Spot exchange rate 
D)  Multilateral netting

Question 16

Capital budgeting in MNEs is protected from country risks or government intervention.

Accepted Answer

A) True 
 B)False

Question 17

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Accepted Answer

Not all countries view substantial debt

Question 18

Which of the following is the first task in international financial management?

Accepted Answer

A)  manage working capital and cash flow 
B)  manage currency risk 
C)  decide on capital structure 
D)  manage the diversity of international accounting and tax practices 
A)  manage working capital and cash flow 
B)  manage currency risk 
C)  decide on capital structure 
D)  manage the diversity of international accounting and tax practices

Question 19

Countries such as Germany, Italy, and Japan view a high debt ratio as undesirable, and the leaders of these nations encourage firms to balance their capital structure with more equity financing, which is readily available.

Accepted Answer

A) True 
 B)False

Question 20

Tax havens are characterized by all of the following EXCEPT that they are ________.

Accepted Answer

A)  legal means to reduce corporate income taxes 
B)  regions where certain taxes are absent 
C)  supported by the World Bank and the EU 
D)  used to establish operations or funnel transactions 
A)  legal means to reduce corporate income taxes 
B)  regions where certain taxes are absent 
C)  supported by the World Bank and the EU 
D)  used to establish operations or funnel transactions

The first task in international financial management is to raise funds for the firm.

Currency swap is an agreement to exchange one currency for another, according to a specified schedule.

Which of the following statements is true of global money market?

Why is harmonization of world accounting systems favored?

Which of the following is characteristic of the parent's perspective in capital budgeting?

Funding obtained from sources inside a firm is known as ________.

All of the following are characteristic of the parent's perspective approach in capital budgeting EXCEPT that it ________.

Capital budgeting is intended to ________.

The purpose of capital budgeting is to defer payment for goods and services received from the parent firm.

Which of the following best explains the emergence of a large Eurocurrency market?

Which of the following is a direct tax?

Momentum trading is accomplished via computers programmed to conduct massive buying or selling when prices reach certain levels.

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

The global capital market has grown rapidly due to government deregulation, which has made international movement of capital easier.

________ is the currency risk that firms face when outstanding accounts receivable or payable are denominated in foreign currencies.

Capital budgeting in MNEs is protected from country risks or government intervention.

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Which of the following is the first task in international financial management?

Countries such as Germany, Italy, and Japan view a high debt ratio as undesirable, and the leaders of these nations encourage firms to balance their capital structure with more equity financing, which is readily available.

Tax havens are characterized by all of the following EXCEPT that they are ________.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Global Sourcing

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 20: Financial Management and Accounting in the Global Firm

The first task in international financial management is to raise funds for the firm.

Currency swap is an agreement to exchange one currency for another, according to a specified schedule.

Which of the following statements is true of global money market?

Why is harmonization of world accounting systems favored?

Which of the following is characteristic of the parent's perspective in capital budgeting?

Funding obtained from sources inside a firm is known as ________.

All of the following are characteristic of the parent's perspective approach in capital budgeting EXCEPT that it ________.

Capital budgeting is intended to ________.

The purpose of capital budgeting is to defer payment for goods and services received from the parent firm.

Which of the following best explains the emergence of a large Eurocurrency market?

Which of the following is a direct tax?

Momentum trading is accomplished via computers programmed to conduct massive buying or selling when prices reach certain levels.

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

The global capital market has grown rapidly due to government deregulation, which has made international movement of capital easier.

________ is the currency risk that firms face when outstanding accounts receivable or payable are denominated in foreign currencies.

Capital budgeting in MNEs is protected from country risks or government intervention.

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Which of the following is the first task in international financial management?

Countries such as Germany, Italy, and Japan view a high debt ratio as undesirable, and the leaders of these nations encourage firms to balance their capital structure with more equity financing, which is readily available.

Tax havens are characterized by all of the following EXCEPT that they are ________.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Global Sourcing

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters